RHM Group has introduced a number of pension changes in a bid to keep its defined benefit plan despite a significant deficit. The food firm, known for its Hovis and Mr. Kipling brands, has a pension scheme deficit of over £500m. The introduction of the Pension Protection Fund next month (see box below) means that all organisations with defined benefit (DB) schemes will have to pay a levy based on the size of their pension deficit, the expected risk involved and the number of staff in the scheme. As a result RHM, which has nearly 10,000 staff in its DB final salary scheme, is changing its accrual rates and altering the definition of pensionable earnings so that it can afford to ensure that all employees are still eligible to enter the scheme. >From September 2005 employees will need to pay a higher contribution rate to retain the same accrual rate. They can choose to pay contributions of 8% or 6% to receive an accrual rate of 1/60 or 1/80 respectively and depending on length of service 3.5% or 4.5% to receive a final salary benefit accrual rate of 1/120. There will also be a freeze on pensionable earnings. Any increase to basic pay between April 2005 and April 2009 will not count towards pensionable earnings. The firm, which is owned by venture capitalists Doughty Hanson, is also introducing a salary sacrifice element to the scheme to take advantage of National Insurance savings for the company and the employee.